One of the largest deals in the country took place in South Florida’s Hollywood, where the Diplomat Hotel and Resort sold to a joint venture between Credit Suisse and Trinity Fund Advisors for $835 million.
The joint venture purchased the hotel — at one point the only hotel between Miami and Fort Lauderdale — from Brookfield in the largest single asset sale of the year and third largest for a hotel in the country. The deal was brokered by Kevin Davis, CEO of JLL Hotels and Hospitality for the Americas, who described the deal as a win-win for both parties and represented Brookfield in the transaction.
The Diplomat Beach Resort and Hotel first opened in 1958 and was last renovated in 2018. The hotel consists of a twin-spired, 33-story tower with 1,000 guest rooms and suites, as well as 200,000 square feet of meeting and events space. The hotel includes eight restaurants and bars, a 14,000-square-foot spa, and 10 acres of beachfront access along the Atlantic Ocean.
Located at 3555 S. Ocean Drive, the hotel is a little under 20 miles north of downtown Miami and nine miles south of Fort Lauderdale.
The deal itself entailed the buyers assuming the existing mortgage and mezzanine loans on the property, as well as a long-term branding and management agreement with Hilton to re-flag the property as a Signia, the hospitality company’s premier luxury meetings and events brand. A property improvement plan was also part of the deal.
Altogether, the transaction included a CMBS loan assumption, brand balance sheet commitments, two private equity investors and a forward land sale commitment with Related Group and BH Group that included two developable parcels and access/rights agreements for a future project.
The deal’s size and complexity earned it a 2024 CoStar Impact Award for sale/acquisition of the year, as judged by a local team of real estate professionals familiar with the market.
The acquisition clears the way for a comprehensive capital plan from Trinity and Credit Suisse. Plans include re-activating the hotel’s restaurants, pool deck and common areas in a bet that South Florida will continue to see tailwinds from pent-up, higher-end group demand in the aftermath of the 2020 pandemic over the next few years.
About the Deal: The Diplomat Hotel first opened in 1958 and was renovated in 2018 for $90 million. The hotel includes 1,000 guest rooms, 200,000 square feet of events space and eight bars and restaurants.
What The Judges Said: The complexity of this transaction due to the number of players involved, complex in-place agreements, additional purchase agreements involving adjacent tracts of land and assumption of financing allowed for numerous ‘deal killing’ issues to arise,” said Robert Eckstein, a principal at NAI Miami - Ft. Lauderdale. “Not to mention it was the largest single asset deal of 2023,” he added.
They Made It Happen: Kevin Davis, Americas CEO of JLL Hotels and Hospitality; Greg Dickhens, managing partner at Trinity Investments, and Sean Hehir, president and CEO of Trinity Investments; Samuel Gleeson, managing director at Brookfield and Shai Zelering, managing director at Brookfield.